CITIC Construction Investment: Inflation levels in July have decreased, with both CPI and PPI year-on-year growth rates narrowing.

CITIC Securities research report believes that inflation levels dropped in July, with both CPI and PPI year-on-year growth rates narrowing. In terms of CPI, the decline in gasoline price increases became a major influencing factor, with the core CPIexcluding food and energygrowing year-on-year by 0.9%, indicating a mild growth status with minimal marginal changes. Regarding PPI, the decline in prices of petroleum and chemical-related raw materials has led to a slowdown in the year-on-year growth rate of PPI, which has now passed its peak. Overall, the decrease in inflation levels in July still shows notable input characteristics, as the drop in international crude oil prices has significantly reduced domestic inflation pressure. On the market side, the current price data continues to support a strong medium to long-term trend in the bond market, but due to the minimal changes in core CPI, there hasn't been a fundamental change in the inflation pattern in the short term. Attention should be continuously paid to the trend of core CPI to judge the window for the central bank's incremental monetary policy.